A liquidated damages provision specifies that a certain amount is to be paid in the event of a future default or breach of contract.

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A liquidated damages provision is a clause in a contract that specifies the amount of damages to be paid in the event of a future breach or default. This helps both parties to the contract by providing certainty about the consequences of a breach or default, rather than leaving the amount of damages to be determined by a court or arbitrator.

A Liquidated Damages Provision Specifies That a Certain Amount Is